Clark County home sales retreated 8.9 percent in December, but the local housing industry still finished strong in the last three months of the year, with a 14 percent increase in sales over the same period a year ago.

Home prices completed the year with a strong showing as well, according to a report issued Monday by Portland-based RMLS. The median sales price in December rose to $211,000, up 3.7 percent from the previous month. The median sales price — half sold for more, half for less — in December also represented a 19.9 percent increase over the same month in 2011, when the median price was $176,000.

Sales in the fourth quarter followed a trend in place for most of the year: The number of sales rose steadily while the number of local houses listed for sale continued to fall. The activity prompted an increase in homebuilding to meet the growing demand for houses.

Builders say they are selling new houses as fast as they can build them, with demand pushing prices higher.

In 2012, there were 577 permits issued to build single-family homes in Clark County, a 65.8 percent increase from 2011. The homebuilding surge in 2012 was the first year-over-year production increase for Clark County homebuilders since 2010, the year the federal government offered a tax credit for some homebuyers.

Buyers at the start of 2012 were enticed by near-zero interest rates and bank-owned properties at rock-bottom prices. Those price tags began to increase through the year, said Vicki Glasow, a broker with Windermere Steller Group in Vancouver.

"We're approaching a healthier, or more normal, market for sellers and buyers," she said. "I would say we've already hit bottom. It varies by zip code, but for the most part, we've turned the corner."

Other experts said the increased market activity would lead to market appreciation. Some warn that it could still take a while for home values to reach the heights once recorded at the top of Clark County's booming housing market in 2004-06.

"For homeowners who are underwater, it means prices are coming back to them," said Terry Wollam, a broker with Re/Max Equity Group in Vancouver. "If they continue to have patience, they will see their home gain value."

Wollam was does not expect home values to recover completely in 2013, but said recovery could happen in 2015.